Capital values across the UK commercial property sector dropped 0.5% in July, bringing a 16-month run of growth to an end, according to the latest CBRE Monthly Index.
Retail capital values were flat, with the exception of retail warehouses, which was the only retail sub-sector to post growth at 0.1%. Total returns for the sector were 0.5% in July.
In the office sector, capital values slipped 0.1%, dragged down by Outer London and M25 offices. Central London offices posted capital value growth of 0.1%. Rental values for the office sector increased 0.1% in July, while total returns for the sector amounted to 0.4%.
The industrial sector posted a 1.4% fall in capital values over July, the first time negative capital value growth has been registered since June 2020. At the same time, rental values increased 0.7% over the month. Industrials in the South East (0.9%) posted stronger rental value growth than industrials in the rest of the UK (0.7%). In July, total returns were -1.1%.
Jennet Siebrits, UK head of research at CBRE said: ‘After sixteen months of consecutive All-Property capital value growth, the results of CBRE’s July Monthly Index shows that outward yield movement has put pressure on capital value growth. While industrial has shown the greatest fall in capital values, the sector continues to drive rental growth at the All-Property level.’
